What is stock deposit? Why invest in Singapore stock through SMART Savings Plan on uSMART SG?

The Definition and Advantages of Stock Deposits

Definition of Stock Deposits

Stock saving is a long-term investment method that involves continuously buying stocks, accumulating the number of shares, and holding them for a long time, by receiving annual stock dividends and cash dividends issued by the company.

To save stocks, the first step is to choose a good company and continue to buy the company's stocks. When the company makes a profit, it will distribute the surplus to shareholders. Therefore, investors can reduce the cost of holding through the stock dividends issued by the company. If the company distributes cash dividends, investors can invest more funds to buy stocks and enjoy the compound interest benefits of saving stocks. The purpose is to accumulate the number of stocks to earn annual dividend income and also earn the price difference of stock fluctuations.

For investors who are not very familiar with investing in stocks, or those who do not have time to study stocks, they can participate in corporate profits and earn higher interest rates than bank fixed deposits through stock deposits.

Advantages of Stock Deposition

1. Simple investment: Depositing stocks is a relatively simple investment method. Investors can focus on researching and understanding the fundamental development of a company, such as its profitability, competitive advantage, management team, etc. This allows investors to avoid paying too much attention to short-term market fluctuations and technical indicators, and instead focus on the long-term development potential of the enterprise.
2. Dividend income: Holding stocks and receiving dividends is an important advantage of stock preservation. By investing in stocks of companies with stable dividend payment records, investors can create passive cash inflows. Dividends, as a part of corporate profits, provide investors with a stable source of income, which is very attractive for investors seeking cash flow.
3. Time saving: Compared to frequent trading or actively managing investment portfolios, storing stocks can save the time required to mark stocks. Investors do not need to pay frequent attention to market fluctuations and short-term trends, but can allocate more time to other affairs. This is particularly attractive for those who hope to use investment as a part-time or passive source of income.
4. Reduce psychological pressure: Storing stocks is a way of long-term investment, where investors focus more on the long-term value of a company rather than short-term market fluctuations. Compared to frequent trading and chasing short-term gains and losses, investing in stocks can alleviate the psychological pressure caused by market fluctuations. The long-term investment strategy enables investors to better face market fluctuations and be more patient in waiting for long-term growth in their investments.

How to select the stock deposit target?

1. Select high-quality industry leading companies: Look for companies that are in a leading position in their respective industries. These enterprises typically have stable profitability, strong brand influence, and sustained innovation capabilities. By selecting these high-quality industry leaders, investors can share their long-term growth and stable cash.
2. Select companies with good industrial prospects: In addition to earning dividends from the company's rights issue, the company also hopes to earn the price difference of the stocks. Therefore, the industrial prospects of the company in which the stocks are stored are very important. It is not advisable to invest rashly based solely on the high dividends issued by the company in the past. It is necessary to regularly review the company's industrial prospects, revenue information, major news releases, and whether the management level frequently changes, etc., and observe the above information, Regularly review the investment portfolio of existing stocks.
3. Selecting stock targets based on dividend yield: Dividend yield refers to the ratio of dividend payments to stock prices. Choosing stocks with relatively high dividend yields can result in higher dividend income relative to investment returns. However, investors should pay attention to ensuring that the chosen company has sustainable dividend payout capabilities and consider other factors comprehensively.
4. Selecting stock deposit targets based on cash dividend distribution: Focus on the company's cash dividend distribution records. Look for companies with a stable dividend payment history and the ability to continuously increase dividends. This indicates that the enterprise has good cash flow and sustainable profitability, providing stable cash inflows for investors.

For investors who pursue stable cash flow and relatively low risk, a high dividend ETF in the US stock market may be a worthwhile option to consider as a stock option. The following section will introduce US stock ETFs, the advantages of investing in US stock ETFs, the comparison of 10 high dividend US stock ETFs in 2023, Singapore's best deposit rate, and US stock ETF high deposit rate.

Comparison between Singapore's Best Fixed Deposit Rate and US ETF's High Deposit Rate

Singapore's Best Fixed Deposit Rate

As of December 2023, HSBC, SBI, and HLB offer the best fixed deposit rates for various maturities in Singapore. (Note: The rate may vary and may vary depending on the deposit amount and other factors)

However, the interest rate for investing in high dividend stocks in Singapore is higher than the best fixed deposit rate in Singapore. The detailed data is shown in the table below.

Singapore's high dividend deposit rate stocks (>5%)

Why use SMART Savings Plan function to invest in high-dividend products?

Using SMART Savings Plan tools to invest in high dividend products is a convenient and efficient method. Among them, the SMART Savings Plan function is an automated investment strategy that can help investors regularly purchase specific dividend products or fund shares within set time intervals. Investors can set a SMART Savings Plan and specify the investment amount and purchase frequency through intelligent tools or online investment platforms.

The benefits of SMART Savings Plan function include:

1. Diversifying market risk: Regular purchase of dividend products can help investors diversify market risk. Due to regular purchases, investors can purchase dividend products at different market price levels, resulting in an average purchase cost.
2. Long term investment returns: Through fixed investment, investors can adopt a long-term investment strategy and continuously accumulate dividend products. Long term investment helps to cope with market fluctuations and provides investors with better opportunities to participate in the long-term growth of the market.
3. Automation and time-saving: The fixed investment function can automatically execute investment plans, reducing investor operations and management work. Investors only need to set a SMART Savings Plan, and the intelligent tool will automatically purchase dividend products, saving time and energy.
4. Balancing emotions and avoiding emotion driven decisions: The fixed investment function helps investors avoid emotion driven investment decisions. Due to regular purchases, investors do not need to worry too much about market fluctuations and short-term price changes, thus avoiding emotional impulse buying and selling.
5. Flexibility and adjustability: The regular investment function usually has flexible setting options, such as the ability to change the investment amount, purchase frequency, or terminate the regular investment plan at any time. In this way, investors can adjust according to their own needs and market conditions.

What are the advantages of using SMART Savings Plan function on uSMART SG?

1. Support daily, weekly, monthly, specific time, regular buying
2. Support free to set the amount of SMART Savings Plan, starting from 100USD
3. Support free selection of deduction accounts  - either from uSMART SG account or eGIRO bank account.
4. extremely low transaction commissions 
5. Free real-time quotes

Steps for depositing Singapore stocks using uSMART SG SMART Savings Plan function

After logging into the uSMART SG APP, click on  [ Quotes ]  from the bottom of the page, then click on  [ SG ]  at the top of the page and click on the search symbol to search for the high dividend stock codes mentioned earlier in this article. Then click on  [ Trade ]  in the bottom right corner and select the  [ SMART Savings Plan ]  function. The image operation instructions are as follows:

(This diagram is provided for illustrative purposes exclusively)

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We have based this article on our internal research and information available to the public from sources we believe to be reliable. While we have taken all reasonable care in preparing this article, we do not represent the information contained in this article is accurate or complete and we accept no responsibility for errors of fact or for any opinion expressed in this article. Opinions, projections and estimates reflect our assessments as of the article date and are subject to change. We have no obligation to notify you or anyone of any such change. You must make your own independent judgment with respect to any matter contained in this article. Neither we or our respective directors, officers or employees will be responsible for any losses or damages which any person may suffer or incur as a result of relying upon anything stated or omitted from this article.

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